Emerging Asian markets may see another sell-off once the Federal Reserve begins tapering its asset purchases, but with declining risks and better pricing, that may offer a chance to buy, analysts said.
From May to September, expectations that the Fed would begin tapering spurred sharp declines in Asia's markets, with India and Indonesia the hardest hit by fund outflows.
After the much-anticipated tapering didn't materialize in September, most emerging markets recovered some lost ground. But recent stronger-than-expected U.S. economic data have raised expectations for a nearer-term move by the Fed.
(Read more: Will Fed crush emerging markets? The big debate )
A budget deal from the U.S. Congress, freshly announced late Tuesday, "also triggers the expectation that the Federal Reserve is going to tighten policy rather soon," Alain Bokobza, head of global asset allocation at Societe Generale (Euronext Paris: GLE-FR), told CNBC.
"On positioning, it's not good news," he said. "I do expect another round of sell-off when the Fed confirms it's going to taper."
Others agree: "Tapering might cause a 10 percent to 15 percent down move in some emerging markets," private banking group Julius Baer said in a note.
But some are preparing to pounce on the decline. "It would be a great opportunity to buy places like Indonesia, Thailand and the Philippines on (finally) cheap prices," added Julius Baer, which has around 341 billion Swiss francs ($384 billion) under management.
Some aren't waiting, with LGT Capital, an asset manager with around $40 billion under management, beginning to add emerging market equity exposure. "Equity market valuations are more modest, with many emerging markets even looking like a bargain," it said in a note.
While tapering might trigger a knee-jerk sell-off, analysts believe the underlying risks for the region's economies have actually been receding.
"We're seeing the two big risks actually narrow next year," Paul Gruenwald, chief economist for Asia-Pacific at Standard & Poor's, told CNBC.
"The first risk this year was Chinese growth, the so-called downside scenario. It was very fashionable for a while to put in a really bad number for China but we think those downside risks have really been taken out," he said.
The second risk was capital outflows from the region, he said. "We're probably going to get more turbulence. We can't rule that out. But the real effect of future turbulence is going to be lower because the market has already forced a lot of adjustments" on India and Indonesia, he said.
"The reason they were sold off is because they were seen as having external deficits that were too large," he noted. "India's external deficit has come down a lot. Indonesia's has come down as well."
Others also see improvements in markets hard-hit in the last round of taper turmoil.
"We would assume we do get beyond the current impasse in Thailand, that we get the election results and we know what the situation is in India and Indonesia," David Mann, head of Asian research at Standard Chartered, told CNBC. Bokobza also expects India's election will lead to improved economic policy.
Mann also expects a rising global economic tide will float Asia's boat.
(Read more: Why these emerging market taper victims can tough it out )
"If you look at where the macro economies around the world are going, there's a pretty positive story to be told," he said. "The U.S. will be accelerating, China will have stabilized - we think [growth will stay] above 7 percent - and Europe will be growing in aggregate."
As one of the regions most open to trade, Asia is likely to get more support from the economic growth, he said.
"Broadly next year, emerging markets are going to do a bit better in terms of equities than developed markets," Mann said. "We've moved from pricing to perfection in emerging markets earlier this year to something that's a lot more balanced."
-By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1
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